New economic research threatens to undermine the prevailing view that it's worthwhile for students sweat out a high ATAR score in year 12 so they make it into one of the elite Group of Eight universities.

Because one of Australia's blue-chip economic research groups, the Melbourne Institute of Applied Social and Economic Research - part of the University of Melbourne no less - has just said the opposite.

Among those whose graduates earn more are the Australian Technology Network universities (made up of UTS, RMIT University, Queensland University of Technology, the University of South Australia and Curtin University) who make 10 per cent more than Go8 graduates.

Even more surprisingly, graduates from the Innovative Research Universities group (La Trobe, Flinders, Murdoch, Griffith, James Cook and Charles Darwin universities), which are generally regarded as being yet another rung lower in the university pecking order, beat Go8 graduates earnings by 15 per cent. Quelle horreur.

Advertisement

Related Quotes

For reference the Go8, the so called "sandstone universities" whose honour is under threat, is made up of the universities of Melbourne, Sydney, Queensland, Adelaide and Western Australia, as well as UNSW, Monash and the ANU.

Don't underestimate the consternation which these HILDA results are causing in highly status conscious university circles. It's equivalent to a revolution in which the ruling aristocracy is brought low. (And Tuesday was Bastille Day.)

But are these results to be believed? They are credible because HILDA, a long running research project in which a group of about 10,000 households and 25,000 individuals is followed for many years, is one of the most reputable economic studies around.

These particular results on higher education are controlled for many factors including cognitive ability, meaning that they are showing the actual impact which the university learning experience has on graduate earnings, not just an illusory effect which comes from some universities having smarter and more capable students than others.

But there is still reason to be cautious of the results. For one thing they only look at graduates with full-time jobs and not the self-employed.

Another problem is that the results are not controlled for the type of job the graduate is doing. This would give an advantage to a university with a higher proportion of graduates in higher income professions.

Of course the Go8 is leaping on these possible anomalies and doing all it can to damn the findings. "We absolutely question the veracity of the methodology," said Go8 chief executive Vicki Thomson.

The Go8 needs to be aggressive because if HILDA proves to be right the Go8 would lose its raison d'etre. How can their universities justify the prestige and esteem in which they are held if they are being outdone in teaching by lesser institutions?

The top universities' business model absolutely depends on students wanting to come to them.

At the moment, with university fees still capped, the Go8 universities earn the money they need for their underfunded research programs by taking in huge numbers of students and skimming money off each one.

Under the Education Minister Christopher Pyne's fee deregulation model which is blocked in the Senate, they would be able to do even better and monetise their prestige by raising fees.

Either way the Go8 universities need to be able to unquestionably demonstrate to students that they have a superior product, and the HILDA results throw this into doubt.

Having so comprehensively upset the apple cart with the latest HILDA report, the Melbourne Institute team now needs to go back to its data and answer the allegations being thrown by the Go8.

This debate is all to the good. It is very much needed because for too long we have not looked closely at the benefits for graduates of university education.

And if university fees are deregulated – and with governments unwilling to spend more on higher education this seems inevitable – then students will have even more need to know how good their degrees are.